Washington fat cats prosper, rest of America suffers
14 Jan, 2011 22:58
While businesses across the US are closing and millions of people are unemployed, Washington, DC has managed to flourish in the recession.
Federal employees have actually made more money during the recession and more jobs have moved to the Washington area."One thing is sure about this recession is that the public sector employees have been relatively sheltered compared to the private sector," said Economist Veronique de Rugy from the Mercatus Institute.According to the latest census numbers, the average federal employee made a whopping $123,000 last year in compensation and benefits, a private sector employee cashed in at almost half that $61,000."I mean public employees are a powerful voter base for pro government politicians so of course they’re very unlikely to go after them," de Rugy said. Many find it hypocritical since American politicians and the media have been obsessively focused on Wall Street fat cats. A year ago President Obama said, "I did not run for office to help out a bunch of fat cat bankers on Wall Street."Yet at the peak of the recession last year, it was federal workers in Washington who got an average raise of 4 percent – more than double the national average.In the first year and a half of the recession, private sector jobs in the United States shrank by almost 7 percent, however in Washington, federal civilian employment actually grew by almost 10 percent.Peter Schiff, the president of Euro Pacific Capital said Washington and Wall Street have combined to bleed Main Street dry.“All the wealth is that is being sucked out of the private sector and the productive part of our economy is being redirected to Washington, DC. Washington is like a giant parasite feeding off the American economy. The bigger the parasite grows the weaker underlying economy becomes,” he explained. As Washington grows, more people will lose their jobs and the economy will shrink, Schiff argued. Government works are no longer civil servants, but an elite class. “It’s producing big profits on Wall Street, but at the expense of everybody on Main Street,” he said.